irc summer debate 1 - sustainability clause
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IRC Summer Debate #1
IRC debate – sustainability clause – Aug 20122
A sustainability clause in contracts for the WASH sector?
Chair – Patrick Moriarty
Rational and Pro position – Catarina Fonseca
Against position – Jean de la Harpe
IRC debate – sustainability clause – Aug 20123
A sustainability clause in contracts for the WASH sector?
Rational and Pro position – Catarina Fonseca
In the sector, sustainability is a nice to have...
• Very limited concrete changes in the sector to address
the issue
• Consistent evidence in the sector for lack of
sustainability
• Evidence of lack of monitoring data
• Evidence of lack of cost data
• Evidence of lack of aid effectiveness, fragmentation, etc.
IRC debate – sustainability clause – Aug 20124
5
National/local governments are responsible for providing WASH services but…
• Services can be delegated: urban utilities, cooperatives,
user associations, decentralised authorities, etc
• Service agreements take shape between government,
provider and implementer
• The implementer is still liable for infrastructure and for
putting in place mechanisms for service delivery
• This is the standard in most financial transactions - there
are liabilities, guarantees…
IRC debate – sustainability clause – Aug 2012
What if….
…. we have a 10 year “sustainability clause” in contracts between donors and implementers?
Programme/project duration under contract
with donor
WASH services delivered
10 year contractual sustainability clause
Y1 Y10
IRC debate – sustainability clause – Aug 2012
The “clause” should include three things:
• Enforce 10 years sustainable services – the stick
• Invest in sector ‘capacity’ to deliver sustainable services
– the plan
• Learn about the weak parts of the delivery chain and
correct them – the monitoring.
IRC debate – sustainability clause – Aug 2012
Anticipated impact of introducing a ‘sustainability clause’ into contracts
Current contracting arrangements with inadequate sustainability requirements
Introduction of ‘sustainability clause’
• Monitoring focuses on outputs (e.g. number of systems constructed and persons served) and processes (community participation, availability of spare parts)
• Monitoring carried out for limited time after ‘post-implementation’
• Limited anticipation of life-cycle costs
• Institutional mandates for ensuring services not fully considered
• Limited or no external incentive for implementing agency for coordination to ensure sustained impacts
• Monitoring focuses on long-term outcomes (e.g. quality and reliability of services)
• Monitoring post-implementation is supported for minimum of 10 years
• Long-term monitoring efforts integrated/ aligned with national systems
• Contracts for service delivery are custom-made to reflect who is responsible for which activities and life-cycle costs
• Promotion of closer coordination with other implementing agencies and government
Medium-long term with improved sustainability
• Reduced non-functionality• Better services to
consumers• More water and sanitation
‘person years’ per each Euro invested (increase value for money)
• Better cooperation with partners and national government
• Increased economies of scale with increase geographical focus
• Better spread of investments across the full life-cycle
• Greater clarity for institutional mandates across the service life cycle
IRC debate – sustainability clause – Aug 2012
9
Contractual accountability is not the same as ownership…
• Mutual accountability is compatible with ownership
• A donor agency has the right to demand from its fund
recipients that its investments result in sustainable
outcomes
• The challenge for WASH is how to make sure that
accountability is where it should be (service provider)
and making sure there are sufficient “incentives” in
contracts for ensuring implementers will provide
sustained service delivery.
IRC debate – sustainability clause – Aug 2012
IRC debate – sustainability clause – Aug 201210
A sustainability clause in contracts for the WASH sector?
Against position – Jean de la Harpe
Sustainable services provision
• A common goal … for donors, for country governments, for service
authorities, service providers, implementing agents, development
partners – and citizens
• Great to put sustainability on top of the agenda
• Sustainability is complex– anything in a complex environment
carries risk – where the consequences are often unforeseen
• If sustainability was not a complex issue then this debate would not
be happening – and perhaps DGIS would be entering into direct
contracts with governments
IRC debate – sustainability clause – Aug 2012
The clause is not simply about post construction accountability – it is about guaranteeing a service
A service is about capacity and resources - staff, skills, systems, revenue, hydrological conditions
It is governed by national and local policies and political priorities
There is only one grantee – e.g. UNICEF (will be used as an example throughout the presentation)
But that grantee has no authority when it comes to service provision – and the sustainability of that service –
this is the prerogative of local government (within a decentralised framework)
National government is not a grantee in the chain of contracts …. it is not receiving anything – it is local
government that is receiving a ‘project’ or infrastructure.
A sustainability clause is likely (MAY) to create a knock-on effect or ‘chain’ of sustainability clauses in all sub-grantees, sub-implementers and partnership contracts making it in everyone’s interest, to address post-construction accountability.
IRC debate – sustainability clause – Aug 2012
A sustainability clause should motivate implementing agencies and their partners to develop plans (capacities, systems, institutions) for sustainability of services, but it should also include clear incentives and proper methods for enforcement
Isn’t UNICEF already developing plans to support service providers?
This assumes that the capacity, systems, and institutions will result in sustainability
If UNICEF is required to give a guarantee for a service – it effectively is guaranteeing that all the capacities,
systems and institutions will be in place – it can’t just plan it or play the role of capacity builder …
There is only one way to properly guarantee a sustainable service and that is to put the necessary staff and
operational capacity in place – i.e. to itself fulfil the role of service provider (it can’t guarantee the performance of
someone else over a 10 year period)
BUT, of course this is not the intention of the sustainability clause and also
a) flies completely in the face of AE, country ownership and building country capacity
b) Is not the role of international institution such as UNICEF
c) Would be extremely costly – where the risk would be covered in terms of budget (as has been experience
of BOTTs)
HOWEVER
Local governments that lack capacity and resources may be very happy with this option – let UNICEF take
responsibility and ensure the necessary financing IRC debate – sustainability clause – Aug 2012
What are the assumptions underlying the ‘chain of clauses’ (chain of contracts)?
DGIS UNICEFGuarantee
National Government
Guarantee
Guarantee
Local governmen
t
Guarantee
Service provider
$
Project
Citizens
Payment
• The implementer is still liable for infrastructure and for putting in
place mechanisms for service delivery
• This is the standard in most financial transactions - there are
liabilities, guarantees…
• Not the case when taking about provision of a basic service that is a
human right – government is responsible for putting service
provision arrangements in place
• A donor agency has the right to demand from its fund recipients that
its investments result in sustainable outcomes
• This needs to be from government – not international agencies
IRC debate – sustainability clause – Aug 2012
• International agencies cannot provide services, unless they are properly
contracted by government to do so – for example in the case of Suez
IRC debate – sustainability clause – Aug 2012
Sustainability is a challenge
• What is the incentive for the parties down the line to sign such a
clause?
• Sustainability is a challenge – we can’t guarantee it
• there are too many factors involved – politics, local contexts and
priorities, institutional arrangements, local economies, etc
• Governments themselves can’t give such guarantees – (court action
from citizens) … policy does not talk about ‘guaranteeing’ a service – it
talks about ensuring access, progressively rolling out services, etc
• What is UNICEF’s role down the chain … and how does it ensure that
it’s guarantee is followed through to the ground level where the service
is provided
• How do we know that the countries can afford the operation and
maintenance of the infrastructure in the first place?IRC debate – sustainability clause – Aug 2012
Not all countries have equal financial capacity to sustain the infrastructure – therefore a guarantee from Ghana will means something different from Uganda …Ghana’s tax revenue is less than US$ 300 per person per annum – to spend on everythingUganda is US$ 63one size does not fit all
Ghana RSA Uganda BRAZIL USA
GDP (current US$)
39,199,656,051
408,236,752,3
38
16,809,623,489 2476652189880
15,094,000,000,0
00
Population, total
24,965,816
50,586,757
34,509,205
196,655,014
311,591,917
GDP/cap
1,570
8,070 487
12,594
48,442
Tax as % of GDP 0.17 0.27 0.13 0.344 0.269
Tax Revenue
6,663,941,529
110,223,923,1
31
2,185,251,054
851,968,353,31
9
4,060,286,000,00
0
Tax Revenue per cap
267
2,179
63 4,332
13,031
IRC debate – sustainability clause – Aug 2012
To sum up• We all feel strongly about achieving the goal of sustainability – the challenge is HOW
• The problem with the process and content of the sustainability clause is the issue of
unforseen consequences
• there is a significant body of work on this issue in the fields of governance and indeed
complexity theory
• There have been (no doubt) solutions found to complex problems
• the problem with such 'BIG' solutions is that we remember (and talk about) the
successes
• the failures are relegated to the dustbin of history
• Can we as IRC take this risk, in light of the possibility of a multitude of UNINTENDED
CONSEQUENCES?
• remember we are dealing with the Lives of People, Governments of Countries and
Multi-National Organisations here.
• Are we prepared to accept the possibility (risk) of unintended consequences?
IRC debate – sustainability clause – Aug 2012
IRC debate – sustainability clause – Aug 201220
Debate: pro or against?
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